FINRA SIE Practice Test: Questions & Answers: Latest
Updated Solution
/. Which of the following actions is required of a broker-dealer's anti-money laundering
(AML) program?
A) Designating an AML compliance officer.
B) Filing of the firm's AML program with FINRA.
C) Conducting background checks of all employees.
D) Identifying to regulators the employees responsible for Currency Transaction Reports
(CTRs)
/.All of the following risks apply to both foreign and domestic debt instruments EXCEPT:
A) Political.
B) Exchange.
C) Repayment.
D) Interest Rate.
/.Which of the following comparisons BEST describes the essential difference between
a primary distribution and a secondary distribution?
A) A primary distribution can only be made for equity issues while a secondary
distribution can be made for both equity and debt issues.
B) A primary distribution can only be made for issues that exceed a specified dollar
amount while a secondary distribution can be made for issues of all sizes.
C) A primary distribution must be made at a fixed public offering price (POP) while a
secondary distribution must be made at the current market price.
D) A primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares. -
/.The redemption value of an open-end investment company's shares is based on the:
A) Previous offering price.
B) Previous closing Net Asset Value (NAV).
C) NAV computed after the order is received.
D) Offering price compute after the order is received.
/.At issue, which of the following debt securities mature in one year or less?
A) FNMA bonds.
B) GNMA bonds.
C) Treasury notes.
D) Money market instruments.
/.A broker-dealer is permitted to accept payment for a new issue from a new customer
when the:
A) Registration is effective.
B) Red herring is delivered.
, C) Preliminary prospectus is amended.
D) Transaction take place during the cooling-off period.
/.The owner of which of the following products is MOST exposed to inflationary risk?
A) Utility stocks.
B) Treasury bills.
C) Treasury bonds.
D) Blue-chip industrials.
/.Regular way settlement on Treasury bonds is:
A) Same day.
B) Next business day.
C) Second business day (skip day).
D) Fifth business day.
/.In which of the following situations is an employee of a public company permitted to
trade upon information without violating insider trading laws?
A) An independent securities analyst explains to the employee why the earnings for the
company next quarter could be markedly poorer than expected.
B) The employee's neighbor works for the government and informs him that the
government will award a major contract to the company next month.
C) The employee's spouse works in the corporate headquarters and shares with him a
conversation overheard at work regarding possible acquisition targets.
D) A coworker informs the employee of a conversation he had with the administrative
assistant to the company's general counsel regardings key developments in an ongoing
class action lawsuit
/.Which of the following communications with the public is considered misleading?
A) Historical illustrations based on factual performance.
B) Product comparisons that illustrate material differences.
C) A research report that includes a buy recommendation for a specific security.
D) Literature providing 10-year performance information to support predictions of future
performance.
/.An associated person who is not a registered representative is permitted to engage in
which of the following activities?
A) Accept an unsolicited customer order.
B) Provide account opening forms to a new customer.
C) Discuss the attributes of a particular investment product.
D) Prequalify prospective customers as to investment objectives.
/.In the over-the-counter market, the term "spread" refers to the difference between the:
A) Bid and Asked prices.
B) Offered and Asked prices.
C) Indicated and FIrm prices.
D) Opening and Closing prices.
Updated Solution
/. Which of the following actions is required of a broker-dealer's anti-money laundering
(AML) program?
A) Designating an AML compliance officer.
B) Filing of the firm's AML program with FINRA.
C) Conducting background checks of all employees.
D) Identifying to regulators the employees responsible for Currency Transaction Reports
(CTRs)
/.All of the following risks apply to both foreign and domestic debt instruments EXCEPT:
A) Political.
B) Exchange.
C) Repayment.
D) Interest Rate.
/.Which of the following comparisons BEST describes the essential difference between
a primary distribution and a secondary distribution?
A) A primary distribution can only be made for equity issues while a secondary
distribution can be made for both equity and debt issues.
B) A primary distribution can only be made for issues that exceed a specified dollar
amount while a secondary distribution can be made for issues of all sizes.
C) A primary distribution must be made at a fixed public offering price (POP) while a
secondary distribution must be made at the current market price.
D) A primary distribution involves a sale of newly issued shares by the issuer while a
secondary distribution involves the sale of already issued and outstanding shares. -
/.The redemption value of an open-end investment company's shares is based on the:
A) Previous offering price.
B) Previous closing Net Asset Value (NAV).
C) NAV computed after the order is received.
D) Offering price compute after the order is received.
/.At issue, which of the following debt securities mature in one year or less?
A) FNMA bonds.
B) GNMA bonds.
C) Treasury notes.
D) Money market instruments.
/.A broker-dealer is permitted to accept payment for a new issue from a new customer
when the:
A) Registration is effective.
B) Red herring is delivered.
, C) Preliminary prospectus is amended.
D) Transaction take place during the cooling-off period.
/.The owner of which of the following products is MOST exposed to inflationary risk?
A) Utility stocks.
B) Treasury bills.
C) Treasury bonds.
D) Blue-chip industrials.
/.Regular way settlement on Treasury bonds is:
A) Same day.
B) Next business day.
C) Second business day (skip day).
D) Fifth business day.
/.In which of the following situations is an employee of a public company permitted to
trade upon information without violating insider trading laws?
A) An independent securities analyst explains to the employee why the earnings for the
company next quarter could be markedly poorer than expected.
B) The employee's neighbor works for the government and informs him that the
government will award a major contract to the company next month.
C) The employee's spouse works in the corporate headquarters and shares with him a
conversation overheard at work regarding possible acquisition targets.
D) A coworker informs the employee of a conversation he had with the administrative
assistant to the company's general counsel regardings key developments in an ongoing
class action lawsuit
/.Which of the following communications with the public is considered misleading?
A) Historical illustrations based on factual performance.
B) Product comparisons that illustrate material differences.
C) A research report that includes a buy recommendation for a specific security.
D) Literature providing 10-year performance information to support predictions of future
performance.
/.An associated person who is not a registered representative is permitted to engage in
which of the following activities?
A) Accept an unsolicited customer order.
B) Provide account opening forms to a new customer.
C) Discuss the attributes of a particular investment product.
D) Prequalify prospective customers as to investment objectives.
/.In the over-the-counter market, the term "spread" refers to the difference between the:
A) Bid and Asked prices.
B) Offered and Asked prices.
C) Indicated and FIrm prices.
D) Opening and Closing prices.
